Access to finance: Closing the gender gap
Digital finance has allowed for unprecedented numbers of the world’s poorest to open banking accounts, save and transfer money – though a gap in access for women remains. On the occasion of the European Development Days 2018, we sat down with Greta Bull, CEO of the Consultative Group to Assist the Poor (CGAP), to find out what countries can do to make finance accessible for all.
The Consultative Group to Assist the Poor is a global think tank and member coordination group founded in 1995 and housed within the World Bank. With over thirty members, including major bilateral and multilateral development finance institutions and foundations, CGAP focuses on financial inclusion and how this can be accelerated with technology and innovative business models.
“Ever since the launch of M-PESA Mobile Money in Kenya in 2008, [digital finance] has been a very big focus of our industry’s attention,” explained Bull.
The World Bank’s Global Findex database – a demand side survey of people’s access to financial services, published every three years – demonstrates this success. “There have been huge gains in access to financial services since the first Findex was done in 2011,” said Bull. “We’re seeing that happening across Africa, China and in India.”
Despite the substantial progress, with financial account coverage having increased by 1.2 billion adults since 2011, there remains a nine percent gap between women’s and men’s access rates.
This gap has been an area of particular focus for CGAP and governments alike. “A number of countries are doing interesting work to solve that,” Bull said.
Closing the gap
Among the best examples is India. Through the provision of accounts for the population through state-owned banks, but also through microfinance institutions, coverage has increased dramatically. “Six years ago, 35 percent of women in India had access to bank accounts – now it’s about 80 percent,” said Bull.
“I think there’s a lot more that can be done to help women get access”
“They’ve also done this through intentionally targeting government to person social payments, particularly to women and their accounts directly,” she added. “We’ve seen very similar work being taken up in places like Mongolia and Iran, which have also been successful in reaching women.”
While national contexts may vary, much can be learned from the case of India.
“I think that the experience of government-to-person payments is particularly relevant to governments in Africa,” said Bull. Sub-Saharan Africa, she stressed, has an 11 percent gap between women’s and men’s access.
“Mobile network operators have built a very strong financial services ecosystem that has taken many African countries from single-digit access to financial services to over fifty percent,” Bull said. “But I think there’s a lot more that can be done to help women get access.”
Barriers and bridges
“There are a whole bunch of technology and business model aspects to women having access to accounts. These remain difficult, but we’ve seen big improvements so I’m pretty optimistic that’s going to change,” said Bull.
Other issues might be harder to crack, she added. “In some countries, there are actually legal barriers to women having accounts or running businesses, and those need to be addressed. Then there are cultural norms, where women are just not encouraged to be in control of the finances.”
Watch Greta Bull discuss how digital finance has improved women's access to financial services here:
Cultural norms can play out in the other direction too, as in the case of the Philippines, which has a reverse gender gap of 9 percent more women holding financial accounts than men. This is due in part to women being more likely to go abroad and send remittances home, but also because they are more likely to manage finances for their family, explained Bull.
Acting with intention
“Women are better clients in a lot of cases, particularly for credit products,” she said. “They’re better payers; they’re more responsible about paying back. There is great value in being intentional in reaching women.”
From finding and designing products that work for women, to providing gender-sensitive financial services, this can include hiring female financial agents to building agency offices that are closer and easier to access.
“We worked with a large microfinance institution in India – and women would have to sit for several hours and wait for their loans to be disbursed,” Bull said. “There was no place for them to breastfeed, there was no water, and there was no place for children to play… and a lot of the women had children with them.”
Working with the institution, Bull explained, CGAP managed to build private spaces for breastfeeding, a bathroom and a play area for children. “These are the kind of things that make it easier for women to get out and have access to services.”
This article was written by Craig Hill, Journalist and Content Editor at Capacity4dev.